Singer achieves Rs. 20.8 billion revenue in first nine months

Singer Sri Lanka, the country’s consumer durables giant, capped a strong third quarter by announcing group revenues of Rs. 20.8 billion in the year to date, a growth of 12% over the prior year. Revenue growth was driven primarily by significant gains in the retailer’s Communication and Digital Media segment, as well as improvements in the country’s business conditions.

The Company’s Communication and Digital Media segment expanded by 31%, when compared to the same period of the previous year. Every other segment in the retailer’s business portfolio, with the sole exception of the Transportation segment, notched substantial gains: the Agro segment grew by 19%, while sewing products grew by 15%, furniture grew by 13%, white goods grew by 12%, kitchen-related products grew by 11%, and consumer electronics grew by 6%.

The Company’s revenue growth boosted its bottom line, with gross profit increasing by 10%. Although selling and administration expenses increased by 12%, due to inflation and an increase in rents and electricity, other operating expenses declined by 8%. The net finance cost decreased by 11% due to a decline in interest rates and a tight control of borrowings.

As a result, Singer Sri Lanka’s net profit increased by a robust 29%. The Company’s subsidiary, Singer Finance (Lanka) PLC, also recorded steady growth, with revenue increasing by 6% and net profit increasing by 3%. The Group’s overall net profit, in the year to date, rose by 23%.

The Group continues to solidify its position as the country’s leader in the retail of consumer durables. Singer (Sri Lanka) is continually strengthening its industry-best retail and service networks and enhancing its portfolio of world-class brands and products. For example, during the nine months under review, Singer (Sri Lanka) was appointed the distributor for three of the world’s most renowned brands: Sony and Sharp, from Japan; and the American computer technology brand, Dell.

By continually enriching its value proposition, Singer is certain that it will continue to set the benchmark for ‘trusted excellence’ in Sri Lanka.
www.island.lk

Govt. split could impact on foreign investment

By Feizal Samath, Business Editor

Economists now have an opportunity to give true picture of the ‘state of the nation’

While Sri Lanka’s business community reacted cautiously to Friday’s stunning split in Government ranks, economists, speaking mostly off the record, said political stability has become an issue for foreign investors while academia and chambers now have an opportunity to speak about the ‘real’ economic statistics.

“The people cannot be fooled by rosy statistics all the time; the facts speak for themselves and people are more intelligent to see through what some top officials always keep saying to please their political masters,” one economist said, referring to the ‘always positive’ economic data on GDP growth and inflation trotted out by the Central Bank and the Treasury.
On Friday, senior Minister Maithripala Sirisena quit the Government with Minister Rajitha Senaratne and more than 20 other UPFA MPs. He later announced that he would be the common opposition Presidential candidate, endorsed by the United National Party, and resulting in the return of former President Chandrika Kumaratunga to the political stage.

Tourism, the first industry to feel the impact of political instability, is however unlikely to get affected unless there is violence and unrest, according to a cross section of industry. “Most people do not know or care about what is happening in another country unless there is a threat to their security. But we need to keep an eye is how travel advisories will be worded,” one veteran hotelier said, noting however that Sri Lanka’s biggest source market, India and emerging market, China don’t issue travel advisories unlike western nations.
Sri Lanka is targetting 1.4 million tourists in 2015 with the November-February period being the peak season for visitors.

The developments rocked the Colombo stock market as rumours and speculation spread across Friday leading to panic selling and erratic decision-making. “Traders were blindsided,” one broker said, adding that investors were weighing options. “There are questions about President Mahinda Rajapaksa’s next move. What will he do, will he postpone the elections, was a common question,” he said.

The main All Share Index fell by 128.7 points and analysts predicted the week ahead would be ‘extremely’ volatile. While business leaders were cautious and unwilling to comment, economists said political stability – a key indicator for foreign investors – was fragile at the moment with the Government losing its 2/3rds control of Parliament. “Foreign investors have sniffed this in the past five years too and that is why FDI never exceeded 1.5 per cent,” an economist attached to local stock brokerage, said.

The crisis in Government was also reflected in the budget process where several factual errors, correction of figures and implementing proposals even before the Budget is passed, has been the hallmark of the 2015 Budget. (See Business Times) A university economist said the Government has been drifting towards handouts and subsidies possibly realising the undercurrents within the government ranks. “This resulted in a reversal of market-led growth towards Government expenditure-led growth undermining the private sector,” he said, adding that in his own estimation, “the split was the culmination of accumulated economic ills plus weak governance”.

He said the failure in attracting high levels of foreign investment was due to the lack of political freedom, good governance and a corruption-free society.
www.sundaytimes.lk

SL senior citizens have bank deposits worth Rs.750 bln

By Duruthu Edirimuni Chandrasekera

Some 750,000 senior citizens hold accounts in 33 banks worth Rs. 750 billion, data by Sri Lanka Banks’ Association (SLBA) shows. A senior citizen is defined as one who is 59 + years.

This data collected at the request of the Central Bank (CB) on the back of the SLBA urging the CB and the Treasury to extend a scheme in the proposed 2015 budget applicable to state banks to pay 12 per cent interest rates to senior citizens – to cover losses for banks. “We’ll present this data to the CB this week,” Upali de Silva, President SLBA told the Business Times. S.R. Attygalle, Deputy Secretary to the Treasury confirmed, saying that Treasury officials will also attend this meeting.

The state banks are also awaiting Treasury and CB direction to offer a 12 per cent annual interest rate for deposits of pensioners and elders as instructed in this year’s budget, according to officials of these banks. Currently interest rates on deposits are around 7-8 per cent maximum on par with lending rates which are higher. But banks would lose if forced to offer 12 per cent deposit rates as lending cannot be raised to 4-5 per cent more than current rates. Furthermore even the currently, low lending rates is not attracting interest from the corporate sector.

To cover any deficit between lending and borrowing rates, the Treasury is to float a $30 billion bond issue at 12 per cent interest in which state banks can invest.

CB sources said that implementation of this proposal is that an upper limit will be slapped on deposits which will be offered a 12 per cent annual interest rate. “As an example, those deposits below Rs.1 million will be granted this 12 per cent annual interest rate,” a Treasury source said.
www.sundaytimes.lk